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Hospitals join to take big health overhaul step

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Modified: January 18, 2013 at 3:34 pm •
Published: January 18, 2013

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MONTPELIER, Vt. (AP) — The two big academic medical centers serving Vermont, often seen as rivals in the past, announced Friday they are joining forces with 13 other Vermont hospitals and health clinics to form a new "accountable care organization" — OneCare Vermont — to focus on efficiency and quality in health care.

In this May 17, 2011 photo, the Dartmouth Hitchcock Medical Center is seen in Lebanon, N.H. Officials from Burlington's Fletcher Allen Health Care, the Dartmouth Hitchcock Medical Center and other hospitals serving Vermont are joining to announce the creation of the nation's first statewide "accountable care organization." The announcement, made Friday, Jan. 18, 2013, means about 42,000 of Vermont's 118,000 Medicare beneficiaries will get their care from the new entity. Accountable care organizations are called for under the federal health overhaul law of 2010. (AP Photo/Toby Talbot)

"OneCare Vermont represents a huge shift in medical practice in Vermont," said Dr. John Brumsted, president and chief executive officer of Fletcher Allen Health Care.

The federal Affordable Care Act of 2010 called for the creation of such ACOs, which are designed to change the way doctors and hospitals are paid. Right now, most health care is done on a "fee for service" basis, meaning that more procedures mean more income for the provider.

An ACO sets a budget target for caring for a certain population over the course of the year. The provider has two goals: deliver care that meets a series of 33 quality indicators — things ranging from patient satisfaction to answering yes to questions about whether certain preventative health steps were taken; and hold costs down. If the ACO can come in under its budget target, it gets to share in the savings.

Friday's announcement followed approval of the new ACO by the Centers for Medicare and Medicaid Services, the division of the Department of Health and Human Services that is leading much of the implementation of the ACA. OneCare will include the providers delivering care to 42,000 of Vermont's roughly 118,000 Medicare beneficiaries, and officials said it was the first in the country with statewide reach.

"This is the first time that we've been able to arrange for so many hospitals, physicians, and community-based health care services throughout the state to work together to ensure that patients, especially those with chronic conditions such as diabetes or congestive heart failure, will be followed more closely by their primary care provider to reduce the need for hospital admissions or visits to an emergency department," Brumsted added. "This means a healthier patient and a better quality of life."

The announcement by Burlington-based Fletcher Allen, a teaching hospital affiliated with the University of Vermont College of Medicine, and the Dartmouth-Hitchcock Medical Center, the hospital affiliated with Dartmouth's Geisel Medical School, was welcomed by Gov. Peter Shumlin, who said it squared with his push for a streamlined, universal health care system to serve all Vermonters, who are to have government-backed health insurance by 2017.

"The success of health care reform depends on transforming into a more effective, efficient health care system," Shumlin said in a statement. "We need our health care providers to lead this effort. The OneCare ACO is a great example of how health care providers can step up to the challenge, and government can support them."

But when hospital executives Brumsted and Todd Moore, a Fletcher Allen vice president who will serve as CEO of OneCare, unveiled their plans to a Vermont Senate Committee, they got some tough questions from lawmakers.

Some members of the committee wanted to know whether any of the cost savings it's hoped the ACO will achieve will go back to patients in the form of lower health care premiums or co-pays. Others questioned whether the statewide reach would lead to a health care monopoly in Vermont.

Brumsted and Dr. John Butterly, executive medical director at Dartmouth, said both their institutions are non-profits that are always trying to provide the most affordable care they can.